Abstract
The purpose of this research is to identify the factors that can explain practices of voluntary disclosure of information on intellectual capital (IC). This is an empirical quantitative study that seeks to examine the influence of certain firm characteristics (firm size, auditor type, ownership concentration, industry, proportion of non-executive directors (NEDs) on the board, chairman/CEO duality and audit committee) on intellectual capital disclosure (ICD) in Portuguese companies. ICD data for this longitudinal study were gathered from the annual reports of 32 Portuguese listed firms over 5 years using content analysis. The results of this study indicate that firm size and industry are explanatory factors of the level of disclosure of information on intellectual capital. One of the limitations of the empirical part of the study derives from choosing the content analysis method because it is subject to the subjectivity of interpretation. Another limitation is the small sample size and the application only to Portugal which reduces the ability to generalize the results to other settings. This study contributes to the IC literature, providing new empirical data covering the analysis of 5 years of disclosure related to corporate governance.
Similar content being viewed by others
References
Abdolmohammadi, M. J. (2005). Intellectual disclosure and market capitalization. Journal of Intellectual Capital, 6(3), 397–416.
Akhtaruddin, M., & Rouf, M. A. (2011). Corporate governance, cultural factors and voluntary disclosure: evidence from selected companies in Bangladesh. 2011 BAASANA International Conference, Bloomsburg University, BAASANA.
An, Y., Davey, H., & Eggleton, I. R. C. (2011). Towards a comprehensive theoretical framework for voluntary IC disclosure. Journal of Intellectual Capital, 12(4), 571–585.
Barako, D. G. (2007). Determinants of voluntary disclosures in Kenyan companies annual reports. African Journal of Business Management, 1(5), 113–128.
Barako, D. G., Hancock, P., & Izan, H. Y. (2006a). Relationship between corporate governance attributes and voluntary disclosures in annual reports: the Kenyan experience. Financial Reporting, Regulation and Governance, 5(1), 1–26.
Barako, D. G., Hancock, P., & Izan, H. Y. (2006b). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance: An International Review, 14(2), 107–125.
Bar-Yosef, S., & Livnat, J. (1984). Auditor selection: an incentive-signalling approach. Accounting and Business Research, 14(56), 301–309.
Blackburn, V. (1994). The effectiveness of corporate in the US corporations. Corporate Governance, 2(4), 186–202.
Botosan, C. A. (1997). Disclosure level and the cost of equity capital. The Accounting Review, 72(3), 323–249.
Bozzolan, S., Favotto, F., & Ricceri, F. (2003). Italian annual intellectual capital disclosure: an empirical analysis. Journal of Intellectual Capital, 4(4), 543–558.
Brammer, S., & Pavelin, S. (2006). Voluntary environmental disclosures by large UK companies. Journal of Business Finance & Accounting, 33(7 and 8), 1168–1188.
Branco, M. C., Delgado, C., Sá, M., & Sousa, C. (2010). An analysis of intellectual capital disclosure by Portuguese companies. EuroMed Journal of Business, 5(3), 258–278.
Brüggen, A., Vergauwen, P., & Dao, M. (2009). Determinants of intellectual capital disclosure: evidence from Australia. Management Decision, 47(2), 233–245.
Bukh, P. N., Nielsen, C., Gormsen, P., & Mouritsen, J. (2005). Disclosure of information on intellectual capital in Danish IPO prospectuses. Accounting, Auditing & Accountability Journal, 18(6), 713–732.
Buzby, S. L. (1975). Company size, listed versus unlisted stocks, and the extent of financial disclosure. Journal of Accounting Research, 13(1), 16–37.
Camfferman, K., & Cooke, T. E. (2002). An analysis of disclosure in the annual reports of U.K. and Dutch companies. Journal of International Accounting Research, 1, 3–30.
Cerbioni, F., & Parbonetti, A. (2007). Exploring the effects of corporate governance on intellectual capital disclosure: an analysis of European biotechnology companies. European Accounting Review, 16(4), 791–826.
Chow, C. W., & Wong-Boren, A. (1987). Voluntary financial disclosure by Mexican corporations. Accounting Review, 62(3), 533–541.
Clarkson, M. B. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. The Academy of Management Review, 20(1), 92–117.
Cooke, T. E. (1989a). Disclosure in the corporate annual reports of Swedish companies. Accounting & Business Research, 19(74), 113–124.
Cooke, T. E. (1989b). Voluntary corporate disclosure by Swedish companies. Journal of International Financial Management & Accounting, 1(2), 171–195.
Cooke, T. E. (1992). The impact of size, stock market listing and industry type on disclosure in the annual reports of Japanese listed corporations. Accounting and Business Research, 22(87), 229–237.
Craswell, A. T., & Taylor, S. L. (1992). Discretionary disclosure of reserves by oil and gas companies: an economic analysis. Journal of Business Finance & Accounting, 19(2), 295–308.
Donnelly, R., & Mulcahy, M. (2008). Board structure, ownership, and voluntary disclosure in Ireland. Corporate Governance: An International Review, 16(5), 416–429.
Dye, R. A. (1985). Disclosure of nonproprietary information. Journal of Accounting Research, 23(1), 123–145.
Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environment. Academy of Management Journal, 32(3), 543–576.
Ensslin, S. R., & Carvalho, F. N. (2007). Voluntary disclosure of intellectual capital in the Brazilian context: an investigation informed by the international context. International Journal of Accounting, Auditing and Performance Evaluation, 4(4/5), 478–500.
Entwistle, G. M. (1999). Exploring the R&D disclosure environment. Accounting Horizons, 13(4), 323–341.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325.
Ferguson, M. J., Lam, K. C. K., & Lee, G. M. (2002). Voluntary disclosure by state-owned enterprises listed on the stock exchange of Hong Kong. Journal of International Financial Management and Accounting, 13(2), 125–152.
Ferreira, A. L., Branco, M. C., & Moreira, J. A. (2012). Factors influencing intellectual capital disclosure by Portuguese companies. International Journal of Accounting and Financial Reporting, 2(2), 278–298.
Fonseca, M. P. (2004). O Alargamento do Universo das Empresas com Participação em Actividades de I&D (1995 – 2001) Parte I - Evolução das Actividades I&D das Empresas entre 1995 e 2001. [The Universe Expansion of Enterprises with Participation in R & D activities (1995- 2001)], OCES (Observatório da Ciência e do Ensino Superior).
Forker, J. J. (1992). Corporate governance and disclosure quality. Accounting & Business Research, 22(86), 111–124.
Franks, J. R., Mayer, C., & Renneboog, L. (2001). Who disciplines management in poorly performing companies? Journal of Financial Intermediation, 10, 209–248.
García-Meca, E., & Sánchez-Ballesta, J. P. (2010). The association of board independence and ownership concentration with voluntary disclosure: a meta-analysis. European Accounting Review, 19(3), 603–627.
Gomes, P., Serra, S., & Ferreira, E. (2007). Medida e divulgação do capital intelectual: As empresas portuguesas cotadas na EURONEXT. Revista del Instituo International de Costo, 1, 88–115.
Goodstein, J., Gautam, K., & Boeker, W. (1994). The effects of board size and diversity on strategic change. Strategic Management Journal, 15(3), 241–250.
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate and social environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 44–77.
Green, W. (2002). Econometric Analysis, 4th edition, Prentice-Hall, Inc., Upper Saddle River, New Jersey.
Gul, F. A., & Leung, S. (2004). Board leadership, outside directors’ expertise and voluntary corporate disclosures. Journal of Accounting and Public Policy, 23(5), 351–379.
Guthrie, J., Petty, R., Ferrier, F., & Wells, R. (1999). There is no Accounting for Intellectual Capital in Australia: a review of annual reporting practices and the internal measurement of intangibles, paper presented at the International Symposium Measuring and reporting of intellectual capital: experience, issues and prospects (pp. 9–10). Amsterdam.
Guthrie, J., Petty, R., Yongvanich, K., & Ricerri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5(2), 282–293.
Guthrie, J., Petty, R., & Ricerri, F. (2007). Intellectual capital reporting: Lessons from Hong Kong and Australia. Research Report. Edinburgh: The Institute of Chartered Accountants of Scotland.
Haniffa, R. M., & Cooke, T. E. (2002). Culture, corporate governance and disclosure in Malaysian corporations. Abacus, 38(3), 317–349.
Haniffa, R. M., & Cooke, T. E. (2005). The impact of culture and governance on corporate social reporting. Journal of Accounting and Policy, 24, 391–430.
Hidalgo, R., García-Meca, E., & Martínez, I. (2011). Corporate governance and intellectual capital disclosure. Journal of Business Ethics, 100(3), 483–495.
Higgs, D. (2003). Review of the role and effectiveness of non-executive directors. London: Department of Trade and Industry.
Ho, S. S. M., & Wong, K. S. (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, Auditing and Taxation, 10(2), 139–156.
Holland, J. (2001). Financial institutions, intangibles and corporate governance. Accounting, Auditing & Accountability Journal, 14(4), 497–529.
Hossain, M., Perera, M. H. B., & Rahman, A. R. (1995). Voluntary disclosure in the annual reports of New Zealand companies. Journal of International Financial Management & Accounting, 6(1), 69–87.
Inchausti, B. G. (1997). The influence of company characteristics and accounting regulation on information disclosed by Spanish firms. European Accounting Review, 6(1), 45–68.
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831–880.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3, 305–360.
Keenan, J., & Aggestam, M. (2001). Corporate governance and intellectual capital: some conceptualizations. Corporate Governance, 9(4), 259–275.
Krippendorff, K. (1980). Content analysis: an introduction to its methodology. Newbury Park: Sage, Lang.
Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246–271.
Lang, M., & Lundholm, R. (2000). Voluntary disclosure and equity offerings: reducing information asymmetry or hyping the stock? Contemporary Accounting Research, 17(4), 623–662.
Leftwich, R. W., Watts, R. L., & Zimmerman, J. L. (1981). Voluntary corporate disclosure: the case of interim reporting. Journal of Accounting Research, 19, 50–77.
Leung, S., & Horwitz, B. (2004). Director ownership and voluntary segment disclosure: Hong Kong evidence. Journal of International Financial Management and Accounting, 15(3), 235–260.
Lopes, I. (2010). Towards a complementary intangibles reporting approach. Measuring Business Excellence, 14(4), 24–34.
Malone, D., Fries, C., & Jones, T. (1993). An empirical investigation of the extent of corporate financial disclosure in the oil and gas industry. Journal of Accounting, Auditing & Finance, 8(3), 249–273.
Mangena, M., & Pike, R. (2005). The effect of audit committee shareholding, financial expertise and size on interim financial disclosures. Accounting and Business Research, 35(4), 327–349.
Martins, M. M., Morais, A. I., & Isidro, H. (2013). A divulgação do capital intelectual em Portugal na primeira década do século XXI. Tourism and Management Studies, 3, 832–847.
McKinnon, J., & Dalimunthe, L. (1993). Voluntary disclosure of segment information by Australian diversified companies. Accounting & Finance, 33(1), 33–50.
McMullen, D. A. (1996). Audit committee performance: an investigation of the consequences associated with audit committees. Auditing: A Journal of Practice & Theory, 15(1), 87–103.
McNally, G. M., Hock, E. L., & Hasseldine, C. R. (1982). Corporate financial reporting in New Zealand: an analysis of user preferences, corporate characteristics and disclosure practices for discretionary information. Accounting & Business Research, 13(49), 11–20.
Meer-Kooistra, J., & Zijlstra, S. M. (2001). Reporting on intellectual capital. Accounting, Auditing & Accountability Journal, 14(4), 456–476.
Mouritsen, J., Bukh, P. N., & Marr, B. (2004). Reporting on intellectual capital: why, what and how? Measuring Business Excellence, 8(1), 46–54.
Naser, K., Al-Khatib, K., & Karbhari, Y. (2002). Empirical evidence on the depth of corporate information disclosure in developing countries: the case of Jordan. International Journal of Commerce & Management, 12(3/4), 122–155.
Nasir, N., & Abdullah, S. (2004). Voluntary disclosure and corporate governance among financially distressed firms in Malaysia. Financial Reporting, Regulation and Governance, 3, 1–39.
Oliveira, L., Rodrigues, L. L., & Craig, R. (2006). Firm-specific determinants of intangibles reporting: evidence from the Portuguese stock market. Journal of Human Resource Costing & Accounting, 10(1), 11–33.
Owusu-Ansah, S. (1998). The impact of corporate attributes on the extent of mandatory disclosure and reporting by listed companies in Zimbabwe. The International Journal of Accounting, 33(5), 605–631.
Parsa, S., Chong, G., & Isimoya, E. (2007). Disclosure of governance information by small and medium-sized companies. Corporate Governance, 7(5), 635–648.
Patton, J., & Zelenka, I. (1997). An empirical analysis of the determinants of the extent of disclosure in annual reports of joint stock companies in the Czech Republic. The European Accounting Review, 6(4), 605–626.
Pearce, J. A., & Zahra, S. A. (1992). Board compensation from a strategic contingency perspective. Journal of Management Studies, 29, 411–438.
Raffournier, B. (1995). The determinants of voluntary financial disclosure by Swiss listed companies. European Accounting Review, 4(2), 261–280.
Schipper, K. (1981). Discussion of voluntary corporate disclosure: the case of interim reporting. Journal of Accounting Research, 19, 85–88.
Singh, I., & Zahn, J.-L. W. M. (2008). Determinants of intellectual capital disclosure in prospectuses of initial public offerings. Accounting and Business Research, 38(5), 409–431.
Singhvi, S. S., & Desai, H. B. (1971). An empirical analysis of the quality of corporate financial disclosure. The Accounting Review, 46(1), 129–138.
Stanga, K. G. (1976). Disclosure in published annual reports. Financial Management, 5(4), 42–52.
Sveiby, K. E. (1997). The new organizational wealth—managing and measuring knowledge-based assets. San Francisco: Berrett-Koehler Publishers, Inc.
Vergauwen, P. G. M. C., & Alem, F. J. C. (2005). Annual report IC disclosures in the Netherlands, France and Germany. Journal of Intellectual Capital, 6(1), 89–104.
Verrecchia, R. (1983). Discretionary disclosure. Journal of Accounting and Economics, 5, 179–194.
Wallace, R. S. O., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311–368.
Wallace, R. S. O., Naser, K., & Mora, A. (1994). The relationship between the comprehensiveness of corporate annual reports and firm characteristics in Spain. Accounting & Business Research, 25(97), 41–53.
Watts, R. L., & Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. The Accounting Review, 53(1), 112–134.
Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing and the theory of the firm, some evidence. Journal of Law and Economics, 26(3), 613–633.
Williams, M. S. (2001). Is intellectual capital performance and disclosure practices related? Journal of Intellectual Capital, 2(3), 192–203.
Wolnizer, P. W. (1995). Are audit committees red herrings? Abacus, 31(1), 45–66.
Yuen, C. Y., Liu, M., Zhang, X., & Lu, C. (2009). A case study of voluntary disclosure by Chinese enterprises. Asian Journal of Finance & Accounting, 1(2), 118–145.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of Interest
The authors declare that they have no conflict of interest.
Rights and permissions
About this article
Cite this article
Martins, M.M., Morais, A.I., Isidro, H. et al. Intellectual Capital Disclosure: the Portuguese Case. J Knowl Econ 9, 1224–1245 (2018). https://doi.org/10.1007/s13132-016-0412-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13132-016-0412-6